Real Estate Development and City Influence

Christophe Kuna

• A German real-estate developer and multi-millionaire.
• He frequently meets with local politicians to influence building contract awards.
• He believes those with opportunity, time, and money need to be involved in shaping the state.
• Kuna's wealth comes from real estate development.
• He aims to personally ensure his projects, like the Colo neo neighborhood, avoid bureaucratic delays.

Colo neo Project

• A 350 million euro project for a new neighborhood in Cologne.
• Kuna wants the building permit by spring, with construction starting April 1st.
• The project highlights the dilemma between maximizing profits and providing affordable housing.

City Government's Role

• Cologne residents attended a local meeting to discuss the city's future and issues like the divide between rich and poor.
• The city government's role: providing building permits, attracting investors and ensuring sustainability in the housing market.
• Previously, local governments built affordable housing, but privatization in the 1990s shifted control to investors.
• Investors negotiate with the mayor to get their way, or threaten to take their projects elsewhere.

Public Perception of Power

• Residents believe corporations, not politicians, hold the real power.
• Some German parliament members find this frustrating but acknowledge its truth.

Florian Schmidt

• A Green Party member & councillor in Berlin responsible for urban development.
• Currently, he faces a possible eviction from his rental flat due to foreign investors.
• As a politician, he opposes developers like Kuna who prioritize profit over community needs.
• Aims for real estate to be in the hands of housing cooperatives and small property owners.
• Clashed with Kuna over development plans for a former post office tower in his district.
• He was invited to Kuna's New Year's reception, but could not make it.
• He uses his position to steer development equitably but needs investors due to a small budget.

Wealth and Political Influence

• Studies in the US show the wealthy steer the country's direction, influencing policy outcomes.
• Research in Germany indicates lawmakers favor high-income earners, with less consideration for disadvantaged groups.
• An example: wealthy individuals are less likely to support a wealth tax, while lower-income earners want it.

Kuna's Networking

• He has a rented box at a football stadium in Leipzig for 10,000 euros per season for conducting business deals.
• Kuna met with the city finance minister at a football game and resolved a 350 million euro investment issue.

Negotiations and Compromises

• Despite closed-door talks, Kuna and Schmidt haven't reached a deal regarding a building permit.
• The Cologne carnival serves as an icebreaker for Kuna and Schmidt.
• Kuna believes Schmidt should approve the building permit, while Schmidt considers the broader implications.

Influence of Money

• Social psychologist Paul Piff's Monopoly experiment demonstrates how wealth changes behavior.
• Richer players in the rigged game displayed dominant behavior and attributed their success to personal skills.

Real Estate Exhibition in Cannes

• An important annual event with investors pledging billions of euros.
• Politicians depend on businessmen like Kuna, who in turn depends on investors.
• The Mayor of Cologne, Henriette Rika, attends to meet investors.
• Kuna expects to receive the building permit for Colonia by the beginning of July.

Overview of the Global Financial Landscape

• The world's largest property fair showcases cities to attract investors for construction projects.
• Cologne uses the fair to attract investors to build properties in the city.
• The financial economy, where property is an asset for generating more money, contrasts with the real economy, where people build houses for others to live in.
• Asymmetrical ratio between the real and financial economies has grown: early 1970s the economies were equal but by 2017 financial assets were nearly four times the value of the real economy.
• In 2017, financial assets were approximately $300 trillion, while the real economy was worth $80 trillion.
• BlackRock, a major investment firm, manages assets worth about $6 trillion, exceeding the combined state revenues of the US, Britain, and Germany.
• Investors wielding such vast sums have power that can overshadow politicians.

Investor Influence and Real Estate Development

• Investors often control more money than the wealthiest nations, giving them substantial power.
• Some property developers rely on bank loans and investor money for multi-billion euro projects.
• Some investors focus on quickly dividing and selling properties leading to overpriced housing.
• Fast, cheap financing is crucial for property developers like Christophe Cunha.
• Some investors prioritize doing business for profit, sometimes overshadowing those focused on creating added value.

Political Discontent and Shifting Allegiances

• Rents and property prices are increasing, while salaries are stagnant, contributing to public frustration.
• Distrust in politicians is reflected in declining party membership and election results.
• A significant number of residents did not vote in the 2017 general election, where they felt let down by politicians.
• Low voter turnout is prevalent in some neighborhoods, with a notable portion of voters supporting a far-right party.
• Some residents have stopped voting due to a perceived lack of meaningful change.
• Single-parent families face challenges due to inadequate support, affecting their political engagement.

Democracy and Political Views

• A political science expert studied the impact of inequality on democracy.
• There is a growing preference for a strong leader who bypasses elections and Parliament.
• There's a decline in the importance younger generations place on democratic governance.
• Generational attitudes toward democracy are shifting, with younger people showing less attachment compared to older individuals.
• Non-voters and voters for far-right parties are forms of protest against the status quo.

Populism

• Populist movements are capitalizing on voters' concerns, particularly regarding job security and economic issues.
• People are angry because their fate is being decided somewhere else and they are losing their identity.
• Inequality being left unaddressed and risks leading to destructive solutions.

Potential Solutions

• There has been discussion about raffling off seats in the German parliament among ordinary citizens.
• The potential benefits of increasing taxes on wealth have been mentioned.
• It has been proposed cities should be building affordable housing without investors.

Power Dynamics

• Business managers could be more powerful as they are independent.
• Some individuals working behind the scenes are considering entering politics.